Investing in stocks can be a great way to build wealth over the long term. However, for investors on a budget, finding high-quality stocks that are affordable can be a challenge. Fortunately, there are many great options out there for those looking to invest in the best stocks under $20.
These stocks can offer the potential for strong returns, while also providing the opportunity to diversify your portfolio. In this article, we will explore some of the best stocks under $20 for investment in 2023, including both growth and value options.
Importance of Investing in Stocks
Investments in stocks are important because they have the potential to yield higher returns than other investments.
Stocks offer the opportunity for capital appreciation as the value of the stock increases over time, as well as the ability to earn passive income through dividends. Additionally, investing in stocks allows for portfolio diversification and the ability to spread out risk.
Investing in the best stocks under $20 specifically can offer several advantages. Firstly, the lower entry cost allows for a more diversified portfolio, as investors can invest in multiple companies rather than putting all their funds into one expensive stock.
Secondly, smaller companies have more room to grow and increase in value, offering a higher potential for growth compared to established, larger companies. Additionally, investing in the best stocks under $20 allows for the possibility of finding undervalued stocks that have the potential to yield significant returns.
Top Stocks Under $20 for Investment
Here are some of the top stocks under $20 to invest in.
| Symbol | Name | Price | Change% | Niches | Volume | St Score |
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Ford Motor Co. (F)
Ford demonstrates a clear bullish stance on the future of the electric vehicle (EV) industry and is actively working towards securing market share in this lucrative domain. These endeavors are expected to yield favorable results in the long run.
However, it is important to acknowledge that the automotive sector may face challenges in the upcoming months. The EV sector, in particular, is grappling with reduced demand, intensified competition, and pricing battles that result in squeezed profit margins.
In 2020, Ford, the U.S. auto giant, suspended its dividend, which was later reinstated in late 2021. Despite pledging to invest $50 billion in vehicle electrification technology through 2026, some critics have raised concerns about Ford’s focus.
The company, according to CFRA Research analyst Garrett Nelson, has made significant improvements to operations and its shares have an attractive valuation.
Moreover, Nelson believes the company’s ongoing restructuring plan will help cut operating costs and boost productivity, leading to a steady dividend payout for patient investors.
Manulife Financial Corp. (MFC)
Manulife Financial is a powerhouse in the global insurance and wealth management sector.
While some may expect a slight slowdown in revenue growth over the next few quarters, expert analyst Catherine Seifert assures us that Manulife’s stock remains undervalued and boasts impressive operating revenue growth, putting it ahead of its competitors.
As we look ahead to 2023, Seifert identifies several promising growth factors that are poised to benefit the company, including rising interest rates, easing pandemic restrictions, and an uptick in asset values.
The insurance and wealth management giant is projected to experience some fantastic segment operating revenue growth in the coming years. In fact, industry experts are predicting a growth rate between 4% and 7% in 2023, with an even more impressive rate of between 5% and 8% in 2024.
These projections suggest that Manulife Financial is not only poised for success but is actually on the cusp of an incredibly bright future. So if you’re on the lookout for a strong investment opportunity, Manulife Financial may just be the perfect pick for you.
Nokia Corp. (NOK)
Nokia is not just any ordinary tech company – it’s a master of telecom equipment and a provider of digital map data, and it also licenses intellectual property to other companies.
Expert analyst Keith Snyder is keeping a close eye on Nokia’s sales, which have been rising thanks to 5G wireless network upgrade investments in North America and China.
What’s more, Snyder is confident that this particular upgrade cycle will be even larger and longer than previous ones, which bodes well for Nokia’s future growth.
Nokia is gearing up for a major comeback! The company is setting its sights on reclaiming the Mobile Networks market share it lost in recent years, with a specific goal to achieve this by 2023.
With the wind at its back and some impressive sales and revenue projections, Nokia is sure to be a company to watch closely as it makes its triumphant return to the top of the tech industry.
Huntington Bancshares Inc. (HBAN)
Huntington Bancshares may be feeling the heat amid the current banking crisis, with its shares down a whopping 32.1% year to date through May 10 – making it the worst performer on the list.
But don’t count it out just yet! Expert analyst Yokum is optimistic about Huntington’s future prospects and sees this dip as a fantastic buying opportunity.
Despite the challenges, Huntington is actually in a strong position to weather the storm, thanks to its solid focus on full-service consumer and commercial banking, insurance, brokerage services, and investment management, primarily in the Midwest region.
Plus, with 69% of its deposits insured, Yokum believes that the bank is less likely to face deposit outflow risk than its competitors. So, if you’re looking for a smart investment that can weather the storm, Huntington Bancshares may just be the right pick for you.
Factors to Consider When Investing in Stocks Under $20
The following factors should be taken into account when investing in the best growth stocks under $20.
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Company Financials
Before investing in a stock, it’s important to analyze the company’s financials, including revenue, earnings, profit margins, and debt levels. Look for companies with stable financials, low debt-to-equity ratios, and consistent growth over time.
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Company Growth Prospects
The growth prospects of the company are also important to take into account. Look for companies with a strong business model, innovative products or services, and a competitive advantage in their industry.
Additionally, analyze the company’s management team and their ability to execute their growth strategy.
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Industry Trends and Competition
It’s important to analyze the industry trends and competition in the market. Look for companies that operate in industries with high growth potential and low competition. Additionally, research the company’s competitors and their market share to evaluate the company’s competitive position.
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Market Conditions and Volatility
The stock market is inherently volatile, and it’s important to consider the current market conditions and volatility when investing in the best stocks under $20.
Look for companies that are well-positioned to weather market volatility and have a proven track record of performance in both bullish and bearish markets.
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Valuation
Consider the company’s valuation when investing in stocks under $20. Look for companies that are undervalued relative to their peers, have a low price-to-earnings ratio, and have a high potential for growth in the future.
Additionally, consider the company’s dividend yield and its potential for long-term capital appreciation.
Risks Associated with Investing in Stocks Under $20
Here are some risks associated with investing in the best stocks under $20:
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Higher Volatility
Stocks under $20 tend to have higher volatility compared to higher-priced stocks. This means that the price of the stock can fluctuate rapidly, which can result in significant gains or losses for investors.
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Lower Liquidity
Stocks under $20 typically have lower trading volumes, which can result in lower liquidity. This means that it may be more difficult to buy or sell shares of the stock, which can result in larger bid-ask spreads and higher transaction costs.
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Higher Risk of Bankruptcy
Companies with stocks under $20 are typically smaller and less established than larger companies. This means that they may have a higher risk of bankruptcy or other financial problems, which can result in a complete loss of investment.
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Lack of Information
Smaller companies may not have as much publicly available information compared to larger companies, making it harder for investors to evaluate the company’s financials and prospects.
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Higher Transaction Costs
Investing in the best stocks under $20 may result in higher transaction costs compared to investing in higher-priced stocks, as a larger percentage of the investment may be eaten up by commissions and other fees.
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Limited Analyst Coverage
Smaller companies may have limited analyst coverage, making it harder for investors to get a comprehensive understanding of the company’s performance and prospects.
Conclusion
In conclusion, investing in the best growth stocks under $20 can be a great opportunity for investors looking to diversify their portfolios without breaking the bank. We have highlighted some of the best stocks under $20 that show promising growth prospects and strong financials.
However, it is important to remember that investing always comes with risks, and investors should carefully consider market conditions and volatility before making any decisions.
Before investing, research thoroughly and consult a financial advisor to ensure your decisions are aligned with your investment goals and risk tolerance.
With the right approach, investing in top stocks under $20 could potentially yield significant returns for investors in 2023 and beyond
